【正文】 4 SpendingEXHIBIT 5BUSINESS REVIEW CRITERIAUsed to Assess Divisional Commitment to Continuous ImprovementSafetyl Lost time accidents per 200,000 employee hours workedProduct Qualityl Number of customer plaintsFinanciall Return of investmentLost Salesl Market share % where data availableManufacturing Effectivenessl People cost (total pensation $ including fringe) as a percentage of new salesl Plant scrap (kg) as a percentage of total production (kg)Managerial Effectiveness/Employee Empowermentl Employee surveyl Training provided vs. Training plannedl Number of employee grievancesSanitationl Sanitation audit ratingsOther Continuous Improvement Measurementsl Number of continuous improvement projects directed against identified piles of waste/lost opportunity pleted and inprogressEXHIBIT 6ELIGIBLE CCA DEDUCTIONYear Deduction1996 $434,000 1997 $768,0001998 $593,0001999 $461,0002000 $361,0002001 $286,0002002 $229,0002003 $185,0002004 $152,0002005 $1731,000EXHIBIT 7MARKET INTEREST RATESON MAY 18,19961Year Government of Canada Bond %5Year Government of Canada Bond %10Year Government of Canada Bond %20Year Government of Canada Bond %30Year Government of Canada Bond %10 / 10。 Approved Finish Track Result Approval AFE Class 1amp。 and acquiring additional warehouse space, $600,000. Including $400,000 for contingency needs, the total cash outlay for the project would be $ million. The equipment was expected to be useful for 10 years, at which point its salvage value would be zero.The land on which the Winnipeg plant was built valued at 250,000 and no additional land would be necessary for the project. While the expansion would not require Laurentian to increase the size of the plant’s administrative staff, Knowles wondered what portion, if any, of the $223,000 in fixed salaries should be included when evaluating the project. Likewise, she estimated that it cost Laurentian approximately $40,000 in sales staff time and expanses to secure the . contract that had created the need for extra capacity. Last, net working capital needs would increase with additional sales. Working capital was the sum of inventory and accounts receivable less accounts payable, all of which were a function of sales. Knowles estimated, however, that the new highspeed line would allow the pany to cut two days from average inventory age.Added to the benefit derived from increased sales, the project would reduce production costs in two ways. First, the new highspeed line would reduce plantwide unit cost by $, though only 70% of this increased efficiency would be realized in the first year. There was an equal chance, however, that only 50% of these savings could actually be achieved. Second, “other” savings totaling $138,000 per year would also result from the new line and would increase each year at the rate of inflation.Each year, a capital cost allowance (CCA), akin to depreciation, would be deducted from operating ine as a result of the capital expenditure. This deduction, in turn, would reduce the amount of corporate tax paid by Laurentian. In the event that the pany did not have positive earnings in any year, the CCA deduction could be transferred to a subsequent year. However, corporate earnings were projected to be positive for the foreseeable future. Knowles piled the eligible CCA deduction for 10 years (see Exhibit 6). For the purpose of her analysis, she assumed that all cash flows would occur at the appropriate yearend.Three areas of environmental concern had to be addressed in the proposal to ensure both conformity with Laurentian policy and pliance with regulatory bodies and local bylaws. First, design and installation of sanitary drain systems, including rerouting of existing drains, would improve sanitation practices of effluent/wastewater discharge. Second, the provision of waterflow recording meters would quantify water volumes consumed in manufacturing and help to reduce its usage. Last, the refrigeration plant would use ammonia as the coolant as opposed to chloroflurocarbons. These initiatives were considered sufficient to satisfy the criteria of the Cap